Burner phones, coded messages and kickbacks
Lawyers from some of the US’s most elite law firms are among 30 individuals charged in connection with an alleged decade-long insider trading scheme that prosecutors claim generated tens of millions of dollars in illicit profits.
The charges, unsealed in federal court in Boston on Wednesday, claim that lawyers who spent time at several top outfits passed confidential information about unannounced merger deals to a network of traders and middlemen in exchange for kickbacks of up to hundreds of thousands of dollars in cash.
US prosecutors say 19 people have been arrested, with two defendants currently in Russia and Israel treated as fugitives.
The alleged scheme is said to have involved nearly 30 major M&A transactions, including Cigna’s $54 billion (£39.7 billion) acquisition of Express Scripts, Johnson & Johnson’s $30billion (£22 billion) takeover of biotech Actelion, and Amazon’s failed $1.4 billion (£1 billion) bid for iRobot, the robot vacuum cleaner maker.
The backstory is that lawyers allegedly accessed confidential documents on pending mergers through their firms’ document management systems before passing the information up the chain. Nine individuals have already pleaded guilty in related cases dating back to 2024, which were unsealed alongside the new charges this week.
Among those named is Nicolo Nourafchan, who worked at a host of elite US firms between 2013 and 2023 and is alleged to have misappropriated confidential deal information for use by the insider trading scheme. Also charged is New York personal injury attorney Robert Yadgarov, who prosecutors say helped recruit further lawyers into the network.
A third individual, Gabriel Gershowitz, who like Nourafchan worked at several top firms, pleaded guilty in February 2025 to supplying inside information from his employers from 2019 onwards.
The firms have not been named in the indictment but are described as among the largest in the world by revenue, with three headquartered in New York, one in California, one in Illinois and one in Massachusetts. However, as the affected deals are now in the public domain, the firms are likely to be identifiable.
The US Attorney for the District of Massachusetts, Leah Foley, said:
“Our country’s financial markets and professional firms should be free from the rampant fraud and breaches of duty that these charges allege. The trading on unannounced financial news alleged here not only violated the securities laws, but it also took advantage of the special access and ethical duties that come with a law license.”
To avoid detection, defendants and co-conspirators allegedly went to considerable lengths to cover their tracks. Prosecutors say they used burner phones, encrypted apps and coded language, and held in-person meetings at which those involved turned off or discarded their electronic devices before communicating.
On the financial side, the FBI alleges the group traded through shell companies and foreign brokerage accounts, and enlisted others to trade on their behalf, all in an effort to stay under the radar of US securities regulators and law enforcement.